On occasion, a debt solution can change from its standard approach and be adapted to meet a specific person’s situation. It’s for this reason that a “one-size fits all approach” doesn’t work when giving debt advice. This can be demonstrated with a lump sum Trust Deed or IVA. This is also known as an equity only IVA or Trust Deed.

The lump sum IVA and Protected Trust Deed is a one off payment plan when a sum of money is used to repay outstanding unsecured debts. This usually involves offering creditors an asset, like equity from the sale of a house or redundancy money to settle the debts.

Lump Sum Debt Solutions

A one-off payment is only suitable for people in specific situations, such as people who may have an asset, but have recently became unemployed.

An IVA usually lasts for 5 years and a Trust Deed is typically a 3-4 year debt solution in Scotland. However, this is because a monthly contribution is required for the fixed period of time. At the end of the solution any remaining debt is written off.

Some people may not be able to contribute each month towards their debt because of ill health or redundancy, however, they may have a lump sum available. This money could be proposed towards the creditors as a full and final offer.

For example, if £30,000 is owed to 5 different creditors and a person were to be ill and unlikely to return to work, but they had £10,000 in their bank, then a lump sum debt solution could be proposed. The full and final offering would be similar to the traditional IVA and Trust Deed; protecting a person from their creditors, however it wouldn’t usually last as long. Often a lump sum IVA or Trust Deed would last up to a year before the solution is closed. This is a Scottish debt advice solution only.

Informal Lump Sum Debt Plans

If you only owe one or two creditors then you could consider writing an informal payment plan to each of your creditors. Your creditors may be more willing to accept the plan because in the IVA or Trust Deed the Trustee will take a percentage of the money for managing the solution.

You should speak to our charity debt advisors if you would like help putting a lump sum informal payment towards your creditors.

You should offer creditors a pro-rata amount of your lump sum and agree to the plan once every creditor has responded in writing. The payment should be confirmed in writing that it will be a full and final settlement, with the remainder of the debt being written off.

Hot Points

There are some hot points to remember with an equity only debt solution.


  1. If you can afford to make a monthly contribution then your Trustee in the IVA or Trust Deed will still want you to contribute this.
  2. Some people borrow money from friends and family in order to do the lump sum solution. Ensure you get debt advice before proceeding with this as bankruptcy may be a better option.
  3. If you make the lump sum payment, but then your situation improves while still in the IVA or Trust Deed, you could be asked to pay a monthly contribution for the remainder of the debt solution.
  4. The reason the IVA or Trust Deed closes early in a full and final solution is because all assets and contributions have been gathered in. If the Trustee believes there is other assets they will have to investigate these too. For example, it’s the Trustees responsibility to check the PPI has been claimed and, if appropriate, returned to the creditors.

If you would like debt help on lump sum IVAs or full and final Trust Deeds please contact our charity on 0800 085 0226.

Alternativly you can ask any IVA questions you have in our Debt Advice Forum where our advisers are on hand to help.